Editorial: Cancer’s Sticker Shock: New Drug May Cost $100,000 a Year

By The Sacramento Bee, Calif.

Feb. 24–The health care system’s uneasy alliance with the free market and its unregulated drug prices is bound to be tested, and deservedly so, by the new pricing practices of Genentech and its promising cancer drug, Avistan.

Avistan has been used to treat colon cancer. Studies suggest that it could prolong the lives of patients with late-stage breast and lung cancer. Avistan as a colon cancer medicine has been costing about $50,000 a year. The cost of the same medicine as a breast and lung cancer treatment is expected to be $100,000 a year.

The dosage will be higher for these treatments, but the incremental increase in manufacturing cost is minimal. So what’s going on?

Genentech is signaling that the higher price to treat breast cancer reflects the higher value society places on fighting this disease. That’s different; the usual pharmaceutical industry response is that the high prices are necessary to recover the research and development costs.

For Genentech, Avistan alone could mean as much as $7 billion in annual revenue within a few years. For the health care system, that is billions more in costs than exist now. It is the price of progress.

Perhaps. But there is something unsettling about prices this high and pricing techniques that test the extremes of the market when life hangs in the balance. Health insurers, who have been steadily shifting the costs of care to consumers with higher co-payments and higher deductibles, will likely force cancer patients into paying thousands or tens of thousands of dollars to get this drug.

Market pressures, of course, can go two ways. Companies can push for higher prices. And consumers can push back, with protests aimed at shaming the companies into more public-minded behavior or boycotts. It’s a legitimate question as to how much it is worth to prolong life by a matter of months when life involves the suffering associated with late-stage cancer. Heaven knows what a drug company would try to charge if it had a drug that actually cured this cancer. It’s not hard to imagine the public’s response.

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Copyright (c) 2006, The Sacramento Bee, Calif.

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